A Decade of Investor Action on Climate Change
Investor group urges UK regulators to take action on premium listed companies.
Powerful investor group urges UK regulators to mandate climate risk reporting for nearly 500 FTSE listed companies.
The Investment Association (IA), which has 250 members with £ 8.5 trillion in assets, supported calls for mandatory environmental disclosures amid concerns that listed companies are opaque about how climate risks affect the way they invest. and spend earned money.
The number of FTSE 100 companies that say they have implemented a Climate-Related Financial Disclosure Task Force (TCFD) structure has more than doubled over the past year to 77. However, IA reported that only 53% of companies published reports covering all four key categories – climate management, strategy, risk management, and indicators and targets.
IA calls on the Financial Conduct Authority to make TCFD reporting mandatory for all 480 FTSE listed companies. Investors expressed their views during a recent consultation on this issue, which ended on October 1.
The call goes beyond current plans put forward by the Financial Conduct Authority (FCA) to require companies to disclose climate information or explain why they didn’t, starting with reports to be released in 2022..
IA said the requirement «observe or explain» must be entered for all UK-listed companies with the exception of premium listings. About 1,140 companies are listed on the UK stock exchange, according to the FCA..
Sarah woodfield, Senior Advisor to IA for Strategic Leadership and Corporate Governance, said: «The FTSE 100 has made significant progress in reporting on the impact of climate change on their business. But the UK’s largest companies must now go further and detail how they manage their resources to respond to these risks.».
Investors and investors will be hurt if the company’s value falls due to poor climate risk management, Woodfield said.. «This is why the investment management industry is now calling on the UK regulator to make disclosure of the TCFD mandatory for all premium listed commercial companies. This disclosure will enable investors to effectively integrate climate risk into their investment decisions and, as long-term managers, support and challenge companies in their transition to more sustainable business models.».
IA expects companies to improve reporting even before the regulator takes action. The industry body will prioritize shareholders for the 2021 AGM season this fall and will likely encourage companies to elaborate on their climate change strategies and spending decisions..
In turn, FCA stated: «We welcome the response from the Investment Association and will carefully consider these views along with those of other respondents. We will review their views as we hope to finalize our political position this winter.».
Members of the UN-backed Net-Zero Alliance of Asset Owners, which includes Aviva, the Church of England and the US $ 400 billion CalPERS Foundation, plan to set decarbonization targets for 2025 as part of broader efforts to align their portfolios with the climate goals of Paris and come to "zero" emissions by 2050.